A recent article in the Taipei Times argues that Taiwan is suffering a structural crisis in three areas, with education being one of those areas. The author of the piece has this to say:

The next urgent structural crisis is in the education system. As the birth rate drops, an accompanying sharp drop in demand will pose severe challenges to the educational system as a whole. Even more worrying is that an inability to improve educational quality in response to economic and industrial needs and social changes will create a problem with large numbers of unemployed people holding useless doctoral and master’s degrees.

Unemployment among university graduates is almost three times as high as the general unemployment rate, which has created a situation where many people who “have a degree but not an education,” make up a class of dispossessed educated people. We are now faced with what some media outlets have said amounts to profit-driven schools bringing about the demise of the nation.

When the author refers to "large numbers of people holding useless doctoral and master's degrees", he hits the nail on the head. In another recent piece in the Taipei Times, the headline runs: 'Ph.D holders settle for low-paying jobs.' This is what the article has to say:

A doctoral degree holder defeated nearly 3,000 applicants on Friday to secure a low-paying position as a track maintenance worker for the Taiwan Railways.

The applicant, Wang Hung-min, will become the first person in Taiwan with a doctorate to take up the lowest-ranking position at the TRA. The job pays NT$29,000 (US$988.80) monthly and requires workers to walk 20 kilometers per day to inspect railway tracks.

It would be interesting to know how much money Wang spent on his Ph.d and how long it will take him to pay back any money borrowed on a measly salary of NT$29,000. It should also be noted that if he'd been able to get the job of his dreams at a Taiwanese university, he may have earned only marginally more than working as a track maintenance worker. It seems that doing a Ph.d, or any higher study for that matter, simply doesn't bring a return on your investment. The game simply isn't worth the candle . . .

My Taiwanese wife has been telling me about Taiwan's glut of advanced degree holders for several years now. The examples she's given me are taxi drivers who hold masters degrees and hotel concierges with PhDs.

The problem is that there are too many tertiary institutions offering higher degrees for a price. Years ago there used to be standards and barriers to university entry, but now anyone can go who can pay. This is causing the glut . . . and it isn't just confined to Taiwan either. In South Korea it is a problem too:

Even at Seoul National University, nearly 30 percent of its Ph.D. holders were jobless in 2011 compared to about 15 percent two years earlier.

Big-name firms, apparently responding to official prodding, are hiring or promising to hire more school-leavers and promoting them to higher positions.

Samsung this year hired some 700 high-school graduates for office jobs, in a rare move. SK Group vowed to fill 2,100 jobs — 30 percent of new openings for this year — with such applicants.

Other top firms like LG and Hyundai Motor unveiled a plan to hire high-school graduates in far greater numbers than previously.

“Having many people with advanced degrees is a good thing, but in this country, there are too many of them compared to the number of suitable jobs for them,” Kim Hi-Sam, a researcher at the Korea Development Institute, told AFP.

Seems that Ph.ds won't be worth the paper they're written on soon. Maybe the crafty marketeers will need to invent a Ph.dII to sell to the gullible public? I just hope people will see the light before embarking on such a useless endeavour that will only leave them jobless and in debt.

My point is, why is someone in Taiwan choosing to make an investment in an advanced degree without checking employment prospects first?

This is a very good question that gets to the heart of the matter. For the Taiwanese, and Chinese in general, education is a good thing, and the more education you get the better. Chinese parents invest in their children because they want a return on that investment. Parents have known for a long time that the social sciences and humanities will not bring a return, so they've been steering their children into other subject-areas such as finance, marketing, business, economics, and engineering, where they believe the children will have a better opportunity to land a job upon graduation. However because so many Chinese parents have the same idea, you're left with a glut. Add to this the fact that Taiwan is a fairly small market and there is an world-wide recession and you can see that there is a recipe for disaster in the making. Only yesterday in the Taiwan Times there were reports of students protesting outside the MOE because of plans to increase tuition fees. And students have a right to be angry: Why should they pay more for a 'product' that has less value in the market-place?
“No to tuition increases,” “Withdraw the proposal or step down,” the protestors shouted.

Minor physical clashes broke out between the police and protestors when Tsai Chung-li (蔡忠利), an official from the ministry’s Department of Higher Education, came out to receive a petition from the protestors, but declined to promise to withdraw the tuition fee adjustment proposal.
The protestors attempted to force their way into the ministry building, but were pushed back by the police.

The angry crowd then threw flyers with their appeals across the ministry’s fence, while pasting tuition payment notices on the fence.
“Tuition should not go up, rather, it should go down,” a National Tsinghua University student, Chen Wei-ting (陳為廷) told the crowd. “The government says that it’s facing a budget shortage for education, but we think that budget shortages are happening because the government gives too many tax cuts to big corporatations.”

Regarding the glut, you might wanna check out this from the online Asia Times, which has this to say:

The number of people studying for doctoral degrees is skyrocketing. Since the 2005-2006 academic year, the figure has risen almost three times higher, and as it is with the excessive output of fruit in the farming sector, the overproduction of PhDs threatens the final products massively with devaluation.

There were a total of 3,705 doctoral students at Taiwan's graduate schools in the 2009-2010 academic year, compared to 1,053 in the 2005-2006 period, according to local media. Official statistics say that between 1999 and 2009, the number of Taiwan's PhD holders increased 2.5 times, from 13,000 to 33,000.

Observers agree that the phenomenon correlates neither with job openings at colleges and universities nor demand in the private sector. Full-time professor jobs are so hard to find these days so that even doctorate degree holders from Taiwan's most prestigious institutions as well as top schools of the United States, United Kingdom or Germany end up as teaching assistants, or even worse, as administrative or secretarial staff at local universities' admission offices.

Also, when trying their luck in the private sector, the glaring oversupply of PhD holders appears to bring about only marginal returns for the extra effort and time spent in gaining the doctorates.

According to a survey conducted by a local human resources firm, for the financial, investment or insurance sectors, as well as electronics and information industries, the difference in starting salaries between holders of bachelor's degrees and those with doctorates is about US$150 per month; for legal and accounting firms, the research and development sector, services industry, retail and wholesale sector, the margin was just US$120.

It was not until recently that the Ministry of Education (MOE) - criticized for having sat back too long - decided to intervene. In a bid to avoid Taiwan-conferred PhDs becoming not worth the paper they are written on, limits will be set on the number of people allowed to study for doctoral degrees. Also, the opening of new doctoral classes, which, according to the ministry, have been enjoying approval rates of around 20% annually over the past several years, will be subject to stricter regulation.

Far more complex than the set of new rules thought up by the authorities are the causes of Taiwan's PhD glut. In interviews with Asia Times Online, local experts shed light on the factors shaping the issue.

"The rise in the number of PhD candidates is attributable in a large part to the global economic crisis," said Mo Reddad, a lecturer at Kaohsiung's I-Shou University and commentator on Taiwanese educational affairs. "Due to the downturn, parents cannot afford to pay for their children's education overseas."

He said the slow economic growth is also to blame for more people pursuing PhD degrees as they seek to safeguard their current jobs or secure new ones, emphasizing that Taiwan is a very status-conscious country, which also plays a role. "In a society where collective identity is predominant, the success of the child is the success of the parents. A mother whose son becomes a doctor takes on a new identity: the doctor's mother," said Reddad.

Reddad's remarks regarding overseas studies are reflected in US statistics. In the 2009-2010 academic year, Taiwan sent nearly 27,000 students to the US, a 4.9% decrease from the year before. Since having peaked in the mid-1990s, when 38,000 Taiwanese students went to the US, the number has been declining steadily. Supporting Reddad's assessment, costs are cited as the main factor for the decrease.

Charlene Chang, spokeswoman for online recruitment firm 1111 Job Bank, referred to the Taiwanese PhD boom as "a long story". Echoing Reddad's remarks, Chang said that Taiwanese parents tended to push their offspring to study for a higher degree not only in order to get better salary but also gain more respect in society.

"However, when they get the degree, they realize only education and IT [information technology] industry pay well for PhDs. Other sectors fall below expectations," she cautioned.

"During the financial crisis, university graduates went to postgraduate schools directly without work experience in order to avoid unemployment or low payment. The doctoral classes effectively became shelter for less capable students," Chang said. The most important factor, however, involved demography, according to Chang. "Due to the low birth rate, universities have less income so they keep their doors wide open," she said.

While Taiwan's birthrate - the world's lowest in 2010 - leaves universities with little choice but to embrace each and every student, this is likely compounded by the sheer number of accredited colleges and universities. The 171 competing institutions are divided by the MOE into basic "teaching" and prestigious "research" universities, with doctoral classes turning the former into the latter, exacerbating the PhD glut phenomenon.
Chang concluded by warning that as doctorate or master's degree courses are designed more for academic studies, they are notoriously assessed by the industry as not practical enough. "Bosses complain that job applicants with higher degrees ask for higher pay but are less efficient at work than university graduates."

An ongoing gender revolution in East Asia is also leaving its mark on Taiwan's doctoral classes. Surveys showed that in recent years, pressures from the conflict between marriage and career have eased significantly for Taiwanese women, making the barriers to doctoral education less of a struggle.

"Although there are still more male than female students enrolled in the PhD programs, the gross university enrollment ratio of females has already surpassed that of males," Yang Wen-shan, a demographer at Academia Sinica, brought into account.

"Because female college graduates put more emphasis on their work and career than ever before, wanting to compete with their male counterparts to obtain higher salary and career opportunities in the labor market, they delay their marriage [and enroll in doctoral classes]", Yang expounded.

Tsai Chia-hung of the Election Study Center at Taipei's National Chengchi University sees the issue in a political light. "The government should have encouraged industries to upgrade technology and develop more know-how a long time ago. If so, it would be easier for PhDs to find jobs," Tsai said. He added that in the short-term, the government should encourage fresh PhDs to improve their language ability for overseas teaching.

Notwithstanding the role governmental institutions' alleged lack of creativity played, the political fallout of the doctoral glut is assessed by Tsai as rather minor. "I don't think college students will take to the streets to protest against unemployment. But their discontent may turn to abstention from the [January 2012 presidential] election." Tsai predicted.

According to Wang Li-yun, professor at National Taiwan Normal University's Department of Education, to many Taiwanese, taking up doctoral classes is simply a choice that doesn't hurt.

"With the easy access to the programs, many people who are employed full time and actually enjoy job security would love to get the degree. This is because a PhD comes along with more opportunities for promotion while no significant risk or cost is involved. They say to themselves: Why not get a PhD? It's like a personal collection," she said.